Spain’s inflation rate rose for the second consecutive month, reaching 2.4% in November, aligning with economists’ expectations. This follows a three-year low rate of 1.5% in September. German inflation data is set to be released later in the day, with broader euro-zone inflation figures expected on Friday.
Analysts predict inflation in the 20-nation bloc will rise from 2% to 2.3% in November. Markets have fully anticipated a 25-basis-point interest rate cut from the European Central Bank at its upcoming December 12 meeting. However, expectations for a larger 50-basis-point cut have diminished despite continuing concerns over weak growth in the euro area.
In currency markets, both the euro and British pound fell by around 0.2% against the U.S. dollar during mid-morning trading, retracting from gains earlier in the week. Investors are closely monitoring the impact of U.S. economic policies and European political developments.
Spain’s inflation signals broader trends
Analysts suggest that recent positions taken by investors might have overestimated U.S. inflation risks, leading to a temporary pullback in the dollar’s strength. French spirits maker Remy Cointreau reported a 12.9% decline in first-half operating profit to 147.3 million euros, performing better than analysts’ predictions of a 20.6% decline. Despite weak demand in the U.S. and Asia-Pacific, the company managed to maintain margins through rigorous cost management, implementing a 50-million-euro full-year savings strategy.
Consolidated sales fell by 15.9% organically during this period. The company does not expect growth in the Americas before the fourth quarter at the earliest. A survey by the British Retail Consortium indicated that U.K. consumer confidence remains fragile, with November polls showing a slight decline in opinions on the economy.
Political and economic uncertainties continue to weigh on business sentiment in the country, with retailers facing higher costs in 2025 as a consequence of recent government budget decisions. In summary, European markets are showing resilience and gains amidst mixed economic signals and significant corporate actions. The developments in stock performances, inflation data, and takeover bids will continue to inform investor decisions as the year progresses.
